After 5 years of political stalemate and a mediation process led by the Southern African Development Community (SADC), presidential and legislative elections took place in Madagascar at the end of 2013. Mr. Hery Rajaonarimampianina was elected president and took office on January 25, 2014.
Following the resignation on January 12th of Prime Minister Roger Kolo and his government (which had been in office since April 2014), the President of the Republic designated General Jean Ravelonarivo as prime minister on January 14th. The new government was presented on January 25th, and includes 29 ministers and one secretary of state in charge of the national police force. Three-quarters of the ministers present in the previous cabinet have been reappointed.
Many international partners, who did not recognize the transitional government that came to power in 2009 through unconstitutional means, have normalized their relations with Madagascar in light of the last elections.
The Government of Madagascar identifies the “fight against poverty through inclusive growth” as its main objective and possesses a strategy centered on three pillars: improving governance, promoting economic recovery, and expanding access to basic social services. This strategy has been outlined in the Programme Général de l’Etat (PGE) and translated into a 2015-2019 National Development Program (Programme national de développement or PND).
The macroeconomic situation remained generally stable at the end of 2014. GDP growth is estimated at 3% in 2014, mainly driven by the extractive industry and the tertiary sector. Inflation was contained at 6% despite the gradual removal of subsidies on petroleum products. The fiscal revenue to GDP ratio remains low (10.1%), well below the target in the revised state budget. Current expenditures continue to consume a large share (75%) of total public expenditures.
The country continues to rank poorly on the ease of doing business index: 163rd out of 189 countries in World Bank Doing Business 2015 report, a decrease compared to the previous year’s ranking of 157th.
Madagascar’s economy is very fragile and its capacity to absorb further shocks is at a bare minimum. Being an open economy, Madagascar is particularly vulnerable to developments in the euro zone, to which Madagascar is particularly exposed—through 80% of its tourism earnings, 50% of its exports of goods, 15% of its foreign direct investment (FDI), and other channels.
Madagascar ranked 155th out of 187 countries in the United Nations 2014 Human Development Report and the country will not reach the United Nations Millennium Development Goals (MDG) by 2015. In particular, the MDGs for child mortality, primary education net enrollment and completion rates, and especially the eradication of extreme poverty, which in 2007 was deemed potentially achievable, can no longer be achieved.
Madagascar is also highly vulnerable to natural disasters—including cyclones, droughts and flooding. It is estimated that one quarter of the population, or approximately five million people, currently live in zones at high risk of natural disasters.
Last Updated: May 12, 2015